Author Topic: Garth Turner - Real Estate in Canada  (Read 488407 times)

50centdollars

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Re: Garth Turner - Real Estate in Canada
« Reply #220 on: September 17, 2014, 05:56:17 AM »
http://www.vancouversun.com/opinion/editorials/Barbara+Yaffe+Absentee+homebuyers+targeted+mayoral/10206155/story.html

Looks like they have an issue in Vancouver with vacant homes. Mayoral candidates are suggesting to tax people who buy homes and don't live in them.

"As much as 25 per cent of condos around Coal Harbour are believed to be unoccupied."



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mcliu

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Re: Garth Turner - Real Estate in Canada
« Reply #221 on: September 17, 2014, 08:30:14 AM »
Why aren't they building more units to absorb all this demand? It's not like there's a shortage of land in Canada and prices are clearly way above replacement value..

50centdollars

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Re: Garth Turner - Real Estate in Canada
« Reply #222 on: September 17, 2014, 08:35:18 AM »
Why aren't they building more units to absorb all this demand? It's not like there's a shortage of land in Canada and prices are clearly way above replacement value..

They're are plenty of homes, people are just speculating...buying 2nd and 3rd properties
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Liberty

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Re: Garth Turner - Real Estate in Canada
« Reply #223 on: September 17, 2014, 09:05:13 AM »
Why aren't they building more units to absorb all this demand? It's not like there's a shortage of land in Canada and prices are clearly way above replacement value..

They're are plenty of homes, people are just speculating...buying 2nd and 3rd properties

Yes, there's more condos being built in toronto than in the rest of north-america combined IIRC. Prices aren't high because of a lack of supply, it's a sentiment thing.
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wisdom

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Re: Garth Turner - Real Estate in Canada
« Reply #224 on: September 17, 2014, 10:34:30 PM »
http://www.bloomberg.com/news/2014-09-17/hong-kong-developers-raise-cash-to-buy-land-real-estate.html

Billionaires in HK have cut debt and are ready with cash to pick up cheaper RE.

This is the only city more expensive than Vancouver.

opihiman2

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Re: Garth Turner - Real Estate in Canada
« Reply #225 on: September 24, 2014, 02:17:51 PM »
First, if 12% CAGR from 2000 is accurate, that is NO way sustainable.  All median housing prices per sq ft, in the U.S. at the very least, has only increased with wage inflation--which, since the late 70's, has mostly gone up with regular inflation.  The notion of housing affordability is strictly tied into incomes.  An "affordable" home should be, by a standard rule of thumb, 3-5x the household income.   A simple thought experiment will vet out that home prices cannot go up higher than incomes in the long term:

Suppose median house prices for homes are going up 1% higher than median house prices, then in 30 years, home prices will be 1.01^30 times higher than incomes (roughly 34%).  In 50 years, prices will be almost 64% higher.  That's just unsustainable.  Although, I do know that Vancouver has seem some tough times.  When I was there in 1999-2000, they were just coming out of a big recession, and back then, the USD/CAD was awesome.  The people I talked to around the city said that their local economies to a huge hit, it was hard to find jobs, etc...  So, I think that housing there must have been depressed--I'm speculating on this.  Thus, maybe the boom in housing up there is occurring from a very low point, and 12% CAGR for 14 years has now just created super expensive housing--possibly bubble territory.  So, this crap could keep going on for a few more years.  Who knows.  What I do know is that my old alma mater had probably the best value in higher ed back in the early 90's.  It was all over US News and Business reports.  Since then, though, the state has cut back majority of its funding, and tuition there has been skyrocketing.  It's insane, but I calculated the CAGR from when I went to school there, and tuition has been increasing by about 9-10% yoy for the past 20 years.  I thought in no way is that sustainable, but it has been growing at those rates for 20 years. 

So, who knows when this sucker will blow up.  But, I believe that it will.  There is no way 12% CAGR for housing prices is sustainable.  Even in the SF Bay Area, I calculated long term CAGR at just 5%.  I don't see how Vancouver has a leg up on SF's incredible tech economy--which I definitely think is in a bubble.

opihiman2

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Re: Garth Turner - Real Estate in Canada
« Reply #226 on: September 24, 2014, 02:18:30 PM »
I really think US is well positioned for a decade or more of growth.  As the planet population doubles.... I think Canada and US are the two developed countries with the infrastructure and capacity for growth.   I'm very bullish about the US!

Are you being serious or sarcastic???  Please be the later.  PUHLEEZZZEEE

gary17

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Re: Garth Turner - Real Estate in Canada
« Reply #227 on: September 24, 2014, 03:14:09 PM »
I really think US is well positioned for a decade or more of growth.  As the planet population doubles.... I think Canada and US are the two developed countries with the infrastructure and capacity for growth.   I'm very bullish about the US!

Are you being serious or sarcastic???  Please be the later.  PUHLEEZZZEEE

LOL.... i just simple minded i guess.... i wasn't sure when the planet is at 12B people... where those 6B should go.... China ? India ? Europe ?   I logically see North America, South America and Africa...    I like to think with the natural resources here ; the technology and the "matured" political system, there's a good chance good things could continue to happen.  Just my view :)

original mungerville

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Re: Garth Turner - Real Estate in Canada
« Reply #228 on: September 24, 2014, 03:36:33 PM »
First, if 12% CAGR from 2000 is accurate, that is NO way sustainable.  All median housing prices per sq ft, in the U.S. at the very least, has only increased with wage inflation--which, since the late 70's, has mostly gone up with regular inflation.  The notion of housing affordability is strictly tied into incomes.  An "affordable" home should be, by a standard rule of thumb, 3-5x the household income.   A simple thought experiment will vet out that home prices cannot go up higher than incomes in the long term:

Suppose median house prices for homes are going up 1% higher than median house prices, then in 30 years, home prices will be 1.01^30 times higher than incomes (roughly 34%).  In 50 years, prices will be almost 64% higher.  That's just unsustainable.  Although, I do know that Vancouver has seem some tough times.  When I was there in 1999-2000, they were just coming out of a big recession, and back then, the USD/CAD was awesome.  The people I talked to around the city said that their local economies to a huge hit, it was hard to find jobs, etc...  So, I think that housing there must have been depressed--I'm speculating on this.  Thus, maybe the boom in housing up there is occurring from a very low point, and 12% CAGR for 14 years has now just created super expensive housing--possibly bubble territory.  So, this crap could keep going on for a few more years.  Who knows.  What I do know is that my old alma mater had probably the best value in higher ed back in the early 90's.  It was all over US News and Business reports.  Since then, though, the state has cut back majority of its funding, and tuition there has been skyrocketing.  It's insane, but I calculated the CAGR from when I went to school there, and tuition has been increasing by about 9-10% yoy for the past 20 years.  I thought in no way is that sustainable, but it has been growing at those rates for 20 years. 

So, who knows when this sucker will blow up.  But, I believe that it will.  There is no way 12% CAGR for housing prices is sustainable.  Even in the SF Bay Area, I calculated long term CAGR at just 5%.  I don't see how Vancouver has a leg up on SF's incredible tech economy--which I definitely think is in a bubble.

Isn't 3-5x on the high side for North America. I think something like 2.5 - 3.5x is the norm historically (but I'm going from memory of a GMO slide from a few years ago).

wisdom

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Re: Garth Turner - Real Estate in Canada
« Reply #229 on: September 24, 2014, 03:56:27 PM »
Africa is supposed to be the centre for future population growth. 4 B from the current 1 B people.